Can't Afford a 5.75% Mortgage, So Get A 4.75% ARM
As this blog points out, fixed 30 year mortgages are already incredibly low, so what's the point of getting a cheaper ARM.
"This is bad news, because an interest rate of 5.5-6.0% is not that high... and yet it's too high for many recent home buyers. If 1-year interest rates to rise by just 1.5%, millions of recent home buyers will find their mortgage payments unaffordable. Yet there are plenty of reasonable scenarios that raise 1-year interest rates by that modest amount in the next year or two... which means that we shouldn't find it surprising if millions of recent home buyers soon find themselves unable to afford to live in their own houses."
"This is bad news, because an interest rate of 5.5-6.0% is not that high... and yet it's too high for many recent home buyers. If 1-year interest rates to rise by just 1.5%, millions of recent home buyers will find their mortgage payments unaffordable. Yet there are plenty of reasonable scenarios that raise 1-year interest rates by that modest amount in the next year or two... which means that we shouldn't find it surprising if millions of recent home buyers soon find themselves unable to afford to live in their own houses."
posted by Little_Silvered at 5:00 PM
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